It Bitcoin (BTC) Lightning Network is the most promising technology to scale Bitcoin to a global payment network. With 7 transactions per second and a block time of 10 minutes, it is unrealistic or rather impossible to make daily payments with bitcoin. Waiting at Albert Heijn until your transaction is included in a new block is not practical. For online payments Bitcoin could still work and for larger payments it is also fine. But to become a global payment network, Bitcoin has to scale in other ways.
The Lightning Network makes it possible to make direct payments with bitcoin and in theory the network can process millions of transactions per second. Yesterday, the billion-dollar company Block (formerly Square) announced that the Lightning Network has become part of the Cash App. A payment application with 70 million users that can currently be used in America and England. In my opinion, the company of CEO and bitcoin maximalist Jack Dorsey is taking a big step towards the adoption of bitcoin.
Why this is big for Bitcoin
The Cash App is currently the most popular financial application in the United States App Store and has more than 70 million users. All those users can now buy and sell bitcoin via the Lightning Network, but also people can pay with bitcoin. This connects the large Block to the Lightning Network in one fell swoop and in theory you can pay with bitcoin wherever they accept Lightning. The next step, in my view, is for Block to make a connection between US dollars and bitcoin.
What does it mean to make a connection between US dollars and bitcoin? Very simple: a user will soon be able to pay with bitcoin with the Cash App and retailers will receive American dollars on their account. For example, if you buy coffee with your bitcoin at Starbucks in the United States, the Cash App in the background automatically exchanges your bitcoin for American dollars and then transfers it to the Starbucks. That way, Starbucks doesn’t even need to know that you paid with bitcoin. This way you can live on a bitcoin standard, without the rest of the world having to go along with it.
In addition, the integration of the Lightning Network in the Cash App can make it a lot easier for people to buy bitcoin. Transactions on the Lightning Network are practically free, which in theory makes it very easy to convert part of your salary into bitcoin every month, for example. Something that Block has been promoting a lot recently through athletes who choose to partially pay themselves in bitcoin through the Cash App.
Accept and adopt bitcoin at the touch of a button
Another interesting aspect of integrating the Lightning Network into the Cash App is that it theoretically makes it very easy for merchants to accept bitcoin. Block has the so-called “point-and-scan to pay” option within the Cash App, with which you can now pay with dollars very quickly and easily. It is not difficult to imagine that in the short term this will probably also be possible with bitcoin in addition to dollars.
At the moment, a retailer has to set up a separate payment system in addition to the already existing payment systems in order to accept bitcoin. With the integration of the Lightning Network in the Cash App, a retailer will soon be able to accept bitcoin at the touch of a button in the same way as he or she accepts dollars.
You can imagine that it is not practical for a retailer who is not technically inclined to accept bitcoin. You have to dig into the material for that and it is also not useful in terms of administration if you work with two separate payment systems. The integration of the Lightning Network in the Cash App could bring big changes, making 2022 the year of the Lightning Network adoption.
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